By Richard Roberts, Editorial Director, Beacon Events

‘The evidence is clear that circular economy mining is a game changer for the extractives sector’

Alan Young says mining’s need to recast itself was being clearly articulated a decade ago by “visionary” leader Mark Cutifani, UN legal advisor Rachel Davis, Sustainable Minerals Institute professor David Franks, and others. Now, he says, there is broader recognition that the industry is “leaving hundreds of millions, if not billions, of dollars on the table” with its traditional model.

A skilled mediator and experienced strategist in conservation, primary industry and government circles for more than 30 years, Young suggests the new model is one built on social equity partnerships and circularity.

“We’re seeing evidence that investments in partnerships with communities and investments in avoidance of waste or emissions are starting to take off,” he says.

“You’ve got deeply invested leadership companies who are putting hundreds of millions of dollars into circularity solutions and making significant investments in equitable governance approaches.

“I do feel that leadership in industry – not just big companies but also a lot of the small companies – is increasingly understanding that these kinds of shared risk and benefit approaches are the things that are going to serve not only stakeholders, but shareholders, into the future.

“I’ve been working in this field for 30 years and I would say in the last 10, but particularly the last five years, we’re seeing more and more of a shift towards market recognition and reward for these investments.

“I believe this will only increase in the future.”

Cutifani, the former CEO of mining major Anglo American currently heading Vale Base Metals, was talking about the importance of the company’s role in the circular economy 10 years ago.

“In 2013 we described ourselves as a mining company,” he said earlier this year, “which conjures up thoughts of a company that simply digs holes.

“However, when we were working with BMW they helped us see our work from a provenance perspective. It was important for them to know where all the 18 products we produced for them came from and whether there were ethical business practices.

“It’s when we started to talk about ourselves as a material solutions company.

“We need to get smarter in using less material for the same applications, as well as recycling.”

Young, a founding director of the 18-year-old Initiative for Responsible Mining Assurance (IRMA) who was involved in the creation of Circular Economy Leadership Canada in 2018, says tomorrow’s materials solutions providers are being moulded today by a range of forces.

“Daniel Franks and Rachel Davis co-authored a study of the costs of company-community conflicts in the extractive sector [in 2014] where they’re quantifying the increasing problems associated with the resistance to the traditional mining model and the costs of major project delays which could be, in net present value terms, up to $2 million a day,” he says.

“The International Energy Agency has produced roughly similar numbers.

“The costs of resource access delays, even at the exploration stage, are mounting. The industry has a resource access problem … Many projects face land use restrictions, water restrictions, rights restrictions: these things are happening in real time. It is happening in key green energy minerals.

“At least half of my work is working with indigenous communities, much of it associated with green energy minerals, and I can tell you that there is a desire and a willingness within a number of those communities to be partnered in real climate solutions. But they are not going to be partnered in a conventional mining scenario where there is biodiversity loss, or water loss, or the result is poverty exacerbation.

“So in these cases, of which there are many in Australia, Canada and elsewhere in the world, you either step up and get your mine done or you spend 10 years in court.

“It won’t grind everything to a halt, but the levels of inefficiency and the cost associated with not doing it differently is profound and will increase.

“The reality is that a shared governance, shared risk, shared benefit approach is the only way you’re really going to make it forward unless you want to deal in a high security environment, which is pretty unstable.”

While technology looms as a disruptor of traditional mining models, Young sees governance at the core of the major change miners face.

“Technology is important, but I’m least worried about technology,” he says.

“I think we can break through on mining value from waste. I think we can get through on emissions reductions: the electrification of mines is happening all over the world. That’s great, and that’s important. But if we don’t get the governance questions down we will fail to gain the permits for production.

“And if we leave out the circularity questions, which is really supply chain partnerships to gain value and preferential access to responsibly sourced minerals, you’re either going to fail or fail to achieve your potential.

“Governance is a key component of circularity.

“While some worry about the circular economy and the green energy transition as a threat, I think disruption is already in the mix and these trends should be seen as a major opportunity.”

Young is heading to Australia in October to participate in IMARC’s first Mining, Metals and the Circular Economy forum.

He has a high regard for what he sees as Australia’s leadership, as an advanced mining and metals jurisdiction, on circularity issues. “I would say that Australia has got a leg up and they should just keep doubling down and challenging on that front.

“I’m not a big conference goer, but what I liked about IMARC’s approach was that they’re really interested in generative conversations, in the sense that they want to ask questions and explore answers that make a difference.

“What we'll be talking about in Sydney is the immense business opportunity that comes when you treat waste as a resource and when you treat partnership as an asset, and again it sounds a little trite to say, but it is true.

“This isn’t another hair shirt people have to wear. This is a business opportunity that can be embraced now to realise significant value for the industry.

“I’m willing to travel halfway across the planet to be part of those conversations.

“And then also, through our network, through folks in Chile and of course some of the Australian colleagues, and African colleagues, we all agreed this looks like a really good place to have a serious conversation about next steps.

“So I’ll be talking on a couple of panels, both of which really focus on this question of circularity – the zero emission, zero waste model – as an immense opportunity for companies to evolve into material solutions providers and to get away from the narrow definition of a supplier of raw materials.

“It means you have different relationships with your supply chains. It means that you have a different valuation of waste as a resource, not as a liability.

“It means that you can appeal in very different ways to finance communities who are seeking to differentiate their investments from conventional mining that has typically brought with it too many liabilities, whether it’s indigenous rights, tailings, or greenhouse gases.

“When I talk with mining companies [via the Initiative for Responsible Mining Assurance] about why they’re doing this sort of certification and assurance work, they say it’s really about overcoming the cost of distrust and trying to develop a climate and a culture of accountability that will mean that our mines come to production faster.

“Importantly this is also a strategy that can help the mining sector attract and retain much needed talent.

“I would argue – and I think there’s plenty of evidence to suggest that – those companies who aren't thinking like that are going to pay a high price.

“There is an opportunity in Sydney to focus on defining and seizing the opportunity, and the skills, strategies and partnerships needed to do that.”